It’s primarily concerned with the payment by results model and with the sector’s role as a contracted service provider. Of course the sector’s role and experiences go much wider than that, for example personal budgets, personalisation and the role of user-led organisations and neighbourhood working and the transfer into community ownership of former public assets.

What it points to are the shifting patterns in the sector’s funding which together with an earlier New Philanthropy Capital survey show clear concerns within the sector about the increasing use of personal budgets, spot and tariff-based contracts and the payment by results model, all of which carry greater risk for the service provider.

What many in the sector would prefer is that we go back to the days when grant funding dominated. That seems unlikely. Even before the current expenditure cuts there was increasing pressure to strengthen accountability. Besides, up to recent years the increasing trend towards contracting was driven by the expansion of the sector’s role in service delivery and not in the main at the expense of grants.

Grant funding still has a role to play as the execution of true strategic commissioning would see grants used to support the core funding of community organisations whose objectives align with those being commissioned. Grants can also be effective in developing and piloting new ways of working and new services.

That said, in other areas a contractual relationships should in theory be a positive operating environment for voluntary organisations. Contracts provide certainty which is not legally possible with grants. But there is a gap between theory and practice which can only be closed by developing new customised contracting models befitting the services being commissioned and the market from which they are procured.

Observing the sector and its engagement with what was once called the public service reform agenda under Labour, and now Open Public Services, you see a sector at a national level that is often ‘clutching at straws’ comforted by ‘forms of words’ or merely being mentioned by the Government in policy and guidance documents. A good example of this is provided by the Work Programme and what the London Voluntary Service Council points to as the “rhetoric” from the Government on the role of the sector which was subsequently found to be “misleading”. This and other examples prove it is not ‘words’ but ‘deeds’ that count.

It is also the case that the developments around outcomes-based contracting and personal budgets which the voluntary sector have become concerned about had been advocated and campaigned for by the sector itself. But it would seem that at best these are transitional issues (probably in the case of personal budgets for adult social care) and at worst the realities have fallen short of expectations (e.g. the Work Programme). The sector needs to ask itself how did this happen?

To simply argue for personal budgets and results based services to be cast aside in favour of the old contracting and funding model is a difficult one to explain to end users (or indeed the taxpayer) even when there are legitimate concerns about the potential impact on the quality of services. The sector needs to do more to develop potential alternative approaches and solutions in partnership with the commissioning community.

So how should the sector and its leadership move forward on the Open Public Services agenda?

1. It should stop reacting to events and become more proactive and ‘get ahead of the game’.

The voluntary sector is certainly capable of doing this; we should not forget that it was the user-led organisational movement which created much of the thinking behind personal budgets and more recently the sector has been playing a leading role in the development of Social Impact Bonds.

But it needs to be more consistent in investing in research and development, particularly as such work is beyond the resources of the vast majority of individual voluntary organisations. There is a risk therefore that at best new solutions coming out from the sector will only work for the bigger players and at worst, Government and commissioners will develop solutions which do not take account of the realities of the sector’s operating environment.

It should go without saying that such R&D work will be better received and more robust if undertaken in partnership with the commissioning community; and it will help enormously if solutions can be found to make the most of all the resources and talents in the sector and not just a small number of larger players.

2. It should establish a direct national relationship with local government and the health service.

For far too long the sector’s national leadership have sought to influence change in these sectors by lobbying Whitehall when the most effective and sustainable route is to find common cause and partnership with the Local Government Association, Solace and the NHS Confederation.

While there are isolated instances where these organisations have worked together these two sectors are far too important to the voluntary sector not to have a visible, strategic and on-going relationship with.

3. It should accept that there are no ‘silver bullets’ to improving the commissioning environment – save greater dialogue with the commissioning community.

Public services, and in particular the local government sector, are so diverse in nature that any work to improve the commissioning environment is best rooted in various commissioning communities at a service level.

A structured and on-going dialogue between the voluntary sector and the commissioning community outside the confines of individual commissions would significantly increase mutual understanding to tackle key issues such as risk and contractual incentives as well as being a framework for developing new delivery models.

A key ingredient for this must be mutual respect underpinned by a common cause in a commitment to serve local communities and service users. A respect that recognises the different constraints and pressures that each sector is operating under.

4. The sector should remember that it is at its best when it advocates for change from the perspective of service users and local communities.

Sometimes within the context of Open Public Services the sector can come across as self-interested. This is far from the sector’s roots and mission.

In part this can be explained by how successive Governments have presented their public service reforms in focusing on ‘who’ should provide public services rather ‘what’ kinds of services are required and ‘how’ they might be delivered. This has been at the detriment of real and meaningful reform. The sector should push back on this and keep reminding us all about the ultimate aims at stake here and look past cosmetic reform.

5. Yes, commissioning practices need to be improved, indeed continuously so, but there are challenges which the sector also needs to grapple with.

There is a sense that much of the sector has not equipped itself for the environment in which it is now operating within. This has come about for a variety of reasons. Nonetheless, the sector is in desperate need to increase its capability in a range of commercial skills, for example in business development and contract negotiation.

Addressing these capability deficits will not only benefit individual voluntary organisations and the sector as a whole, but it will also help to strengthened the overall commissioning environment.

Now of course such an approach from the voluntary sector needs and must be matched by the national leadership in local government and the NHS and by an equal commitment by the commissioning community to engage in meaningful dialogue and partnership.

Results will take time to realise. But those in the sector who are not convinced that this is the right path should ask themselves, what real progress have they made up to now?

This post is written by Mark Upton, LGIU Associate, and is based on hisLGiU member briefingon Open Public Services – experiences from the voluntary sector.